Posted: March 1st, 2014

GDP

Part 1) Write a short 3 paragraph report addressing the following questions:

Obtain data on openness and GDP per capita from the World Bank’s World Development Indicators (http://databank.worldbank.org/data/views/variableSelection/selectvariables.aspx?source=world-development-indicators) to answer these questions.
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1. Calculate openness for a set of 50 countries of your choosing. How has the average level of openness changed for these countries? (10 marks)
2. Using GDP per capita data, compare the openness of richer and poor countries in your sample? (5 marks)
3. List and explain in one sentence what factors do you think drive openness. (5 marks)

Part 2) Write a short 2 page* report addressing the following questions:
Obtain data on openness, GDP per capita, and the GINI coefficient** from the World Bank’s World Development Indicators (http://databank.worldbank.org/data/views/variableSelection/selectvariables.aspx?source=world-development-indicators) to answer these questions.

1. Obtain data for a developing country and a developed country and calculate the correlation (using excel) between openness and the GINI Coefficient for each nation. (8 marks)
2. Explain the Heckscher-Ohlin model and the Stolper-Samuelson theorem (use diagrams if you want to). (7 marks)
3. How does your data fit with the conventional wisdom of the Stolper-Samueson theorem? (5 marks)

* This is a limit of 2 pages; the report can be shorter if you think you have addressed the questions.
** The Gini index measures the area between the Lorenz curve and a hypothetical line of absolute equality, expressed as a percentage of the maximum area under the line. A Lorenz curve plots the cumulative percentages of total income received against the cumulative number of recipients, starting with the poorest individual. Thus a Gini index of 0 represents perfect equality, while an index of 100 implies perfect inequality. The Gini index provides a convenient summary measure of the degree of inequality.

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